Stop Estate Beneficiary Costly Mistakes

Jonathan called me because his uncle Peter died. “What rights do I have as a beneficiary under Peter’s will? When do beneficiaries need to get legal advice?”

“This is a common question when someone dies,” I said. “Your legal rights depend on if you are named in your uncle’s will.”

“How do I know if I’m in his will? I wasn’t invited to the reading.”

Reading of the Will

That’s really an old Hollywood movie trick. No one invites beneficiaries to a formal reading of a will. These days you are lucky if you hear about the funeral.

There is no legal requirement for a will reading. If you are named in the will then you are entitled to notice. Every jurisdiction has different estate rules. Ontario executors (estate trustees) must advise you when they apply to probate the will.

You are entitled to see the portion of the will that refers to you. And you have more rights, as I will explain.

Why are wills probated?

Uncle Peter’s will needs to be probated to sell his stuff, his house or investments. Banks and brokers need proof of who is entitled to administer the estate. They can only hand over uncle Peter’s money to his executor under his last will.

“Jonathan, you may have been Peter’s executor in his 2001 will. But Peter could since have divorced, re-married or made a number of new wills.”

“But he hasn’t.” Jonathan said.

“But the banks don’t know that.” I said.

“They could ask me, couldn’t they?”

Con Artists Target Estates

How do banks know if you are a con artist? Why would con artists tell the bank the truth? The banks need proper legal proof. That comes when the will is confirmed or probated by a court.

A probate certificate satisfies the bank. They can’t then get into trouble handing over your uncle’s money.

As a beneficiary under a will you need to understand your rights. This will help you decide if you need your own lawyer.

How to avoid costly mistakes as an estate beneficiary:

1. Recognize Conflict of Interest

Some conflicts of interest are obvious. Executors tell you they need to borrow estate money or they are buying estate property.

What if the estate is at a standstill? Is the executor explaining why? There may be legitimate issues. Don’t wait until you have been harmed by executor misconduct. If executors act (or fail to act) and put estate property at risk, do not wait.

Is there evidence of dishonesty? You need your own lawyer to investigate a possible breach of trust. You may have grounds to remove or replace executors. When in doubt, speak to your own lawyer.

2. Beware of Estate Time Limits

Certain estate legal proceedings have time limits. Spouses may need to file court claims within six months of a person’s passing. Do you need to contest the will or sue for money owed to you? You may be out of luck if you wait more than two years. Legal advice from an estate lawyer is needed. They can help you identify proper deadlines and your legal remedies.

3. Consider Estate Mediation to Resolve Disputes

Going to court scares most people – especially if they are afraid of losing. However, not getting legal advice may permanently stop you from making claims.

Recently I was asked to get involved in a case where a partner died four years ago. The estate was distributed. All money had disappeared. It is difficult even with a good case to trace money once it is gone. You need to act in time to preserve your rights.

Disputes arise even in the best of families. People have multiple spouses, partners and legal obligations. Estate disputes can be resolved outside of the court system with mediation. Most legal cases involve emotional issues and can settle before trial. The sooner you are advised about how mediation can help you, the better.

4. Learn What Legal Duties Executors Have

Executors and trustees have tremendous legal responsibilities. The court holds them to the highest standard of conduct. Knowing what an executor’s duties are will help you understand risks you can avoid.

As legal fiduciaries, executors are obliged to:

• obey the valid terms of the will
• act as a reasonable and prudent person when handling estate property
• act personally and not delegate responsibilities to third parties
• serve impartially in the best interest of beneficiaries

Executors do not have to answer every single question you have. They have to keep you informed. Usually they have a year to distribute the estate. This means you should expect a report on an estate distribution within a year of a person’s death.

As a beneficiary you can’t insist on any distribution until the will has been probated. Even then, creditors and income tax bills are paid first. This can, in typical estates, take at least a year.

Remember executors are compensated for their time and services. This is the law even if their fees are not mentioned in the will.

5. Get Estate Legal Advice

The lawyer who probates the will is hired by the estate trustee or executor. This lawyer is not the estate’s or the beneficiaries’ lawyer. You can’t obtain independent legal advice unless you hire your own lawyer.

Your legal fees are not paid by the estate. Choose your estate lawyer wisely.

Consult a Lawyer

Do you need a consultation to discuss your rights as an estate beneficiary? Contact me now.

About Edward Olkovich

Executors facing estate challenges call Ed Olkovich, who is a Toronto Certified Specialist in Estates and Trusts Law. Ed is also an author and edits Carswell’s legal guide Compensation and Duties of Estate Trustees, Guardians and Attorneys. He has resolved estate disputes and probate problems since 1978. © 2017